Mortgage Insurance MI

Mortgage Insurance – Who needs it?

Who needs Mortgage Insurance?

If you’re buying a house with less than 20% down payment, the answer is YOU.

Mortgage Insurance is often abbreviated in the industry as “MI”.

Some conforming home loans with less than 20% down do offer “No MI” or Lender-Paid MI. That option can be advantageous if you only plan to be in the home before the MI would have a chance to be removed.

Mortgage Insurance is utilized with low down payment mortgage options, and the rate varies by the type of loan program. The most common in 2018 are:

  • FHA Loan
    • 3.5% down payment (there is currently a 0% down FHA option)
    • 1.75% Upfront MI (Finance-able)
    • .85% Monthly
  • Conventional Loan

While not technically MI, VA Home Loans and USDA Loans do have similar fee structures under another name:

  • VA Home Loan
  • USDA Rural Development Loan
    • 0% down in rural development areas
    • 1% Upfront guarantee fee (Finance-able)
    • .35% monthly (Annual guarantee fee)

MI appears under many names in the financing industry:

  • PMI for Private MI (Conventional loan)
  • LPMI for Lender-Paid MI (Conventional loan option)
  • MIP for MI Premium (a.k.a. FHA MIP)
  • UFMIP for Upfront MI Premium (another FHA MIP – a FHA loan has both upfront and monthly mortgage insurance)

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